5Things to Read on the Tax-Haven Crackdown

For decades, wealthy U.S. taxpayers were able to hide foreign assets in countries where bank-secrecy laws fostered tax havens. But in 2009, after U.S. authorities obtained information about the identities of clients of Swiss banks, they began a sweeping crackdown on hidden offshore accounts. So far, more than 100 taxpayers and advisers have been indicted. More than 43,000 taxpayers have entered amnesty programs. The number of Americans renouncing their citizenship has hit records.

Here’s how the Journal covered key points in the saga:

20 Jun 2014 5:57pm

1UBS to Give 4,450 Names to U.S.

Aug. 20, 2009: The Internal Revenue Service said Swiss bank UBS AG will turn over the identities behind 4,450 secret accounts as part of a settlement with the Swiss government. The disclosures represent a major crack in Swiss bank privacy, and mean the U.S. could begin criminally prosecuting hundreds of wealthy Americans for using foreign accounts to evade taxes.

This is no mere keyhole into the hidden world of bank secrecy.

IRS Commissioner Douglas Shulman

2Whistleblower Gets $104 Million

Sept. 11, 2012: A former UBS banker who helped the U.S. unleash an international crackdown on tax evasion was awarded $104 million in what is believed to be the largest-ever whistleblower payout to an individual. The massive award to Bradley Birkenfeld shows the lengths authorities are willing to go to collect unpaid taxes.

Bloomberg News

3Time to Say ‘Bye’ to Uncle Sam?

Aug. 17, 2013: More U.S. taxpayers with assets abroad are deciding they are better off cutting official ties with America. In the first half of 2013, 1,809 people renounced their American citizenship or permanent-resident status, according to a tally by one tax lawyer. At that pace, the 2013 total would double the previous high of 1,781 renunciations in 2011.

It was a really difficult decision. I had to think about what was best for me and my family.

Swiss resident who gave up U.S. citizenship to ensure he could get a mortgage from a Swiss bank

4The Next Offshore Target

April 4, 2014: U.S. authorities are expanding their investigation of hidden overseas assets far beyond Switzerland. The latest focus: the Cayman Islands. A yearlong IRS probe led to the arrests of three financial advisers based in the Caribbean territory. “The Cayman case illustrates that we have ways of getting information that people don’t know about,” said Assistant Attorney General Kathryn Keneally.

TIPS/Zuma Press

5Expats Break Up With Uncle Sam

Aug. 6, 2014: The ranks of Americans cutting their ties continue to grow, with 2014 on track to equal or exceed the record number of people who renounced their U.S. citizenship or green-card status in 2013.

The tax dragnet has swept up many middle-income Americans living abroad. The most common mistake: failing to submit a form listing foreign financial accounts.

1,577
In the first six months of 2014, U.S. offices abroad reported that 1,577 U.S. citizens and green-card holders had renounced, according to Andrew Mitchel, a tax lawyer in Centerbrook, Conn., who tracks government data. The total for all of 2013 was 2,999, a record.